* Consumer sentiment, new homes, offsets durable goods data
* Surprise dip in global copper stocks lends support (Adds NEW YORK to dateline, recasts, updates with New York closing copper prices, adds analyst comments)
By Chris Kelly and Michael Taylor
NEW YORK/LONDON, Sept 25 (Reuters) - Copper settled higher on Friday, as encouraging consumer sentiment and housing data in the United States and a surprise fall in global inventories bolstered sentiment and enabled prices to recover from earlier one-month lows.
Copper for December delivery HGZ9 on the New York Mercantile Exchange’s COMEX division rose 3.10 cents to finish at $2.7405 a lb, after sinking to a session trough at $2.6730, its lowest level since Aug. 19.
Ralph Preston, futures analyst with HeritageWestFutures.com in San Diego, cited a technical counter-trend bounce in the metal after nearing key support near $2.65 a lb.
“We’re seeing a recovery today on over-sold conditions,” he said. “It was a pretty impressive break this week, but I’m not looking for a big reversal. We might just be opening up to a broader trading range between $2.65 and $3.00.”
On the London Metal Exchange (LME), copper for three-months delivery MCU3 ended up $40 at $5,990. Earlier the metal, used in power and construction, touched $5,900, its lowest since Aug. 19.
Prices were extremely volatile as a batch of data kept investors guessing on the demand outlook for the metal.
Reports from the U.S. Commerce Department on durable goods and home sales overshadowed a jump in the Reuters/University of Michigan Surveys of Consumers sentiment index for September to the highest since January 2008. [ID:nN25390248]
New orders for U.S. manufactured goods dropped by the biggest amount in seven months, and a rise in new home sales fell short of forecast, raising questions about the strength of the economic recovery.
“Like any turning point in an economic cycle, some data disappoints and some surprises to the upside,” said David Thurtell, and analyst at Citigroup. “It will be months, possibly next year, before we get consistently bullish economic data.
“With the LME having priced in the recovery already, the economic data is playing catch up,” he added.
A weaker U.S. currency also made metals priced in dollars less expensive for holders of other currencies. [USD/]
Market sentiment received a boost after the release of the Shanghai copper inventory numbers, which showed a higher than expected decrease in weekly inventories. [ID:nBJD003086]
In London, data showed stocks down 175 tonnes, but at 340,700 they are still over 30 percent above mid-July levels.
Copper also got support from a pledge by G20 leaders to keep stimulus measures in place until the recovery is more entrenched.
On Thursday, investors flocked to the safety of the dollar away from risky assets like copper after the world’s major central banks jointly announced steps to trim cash injections into their banking systems. [USD/]
The copper price has roughly doubled this year, mostly due to speculative buying, improved macro-economic data and record Chinese import buying, which is now expected to fall.
Data this week showed China’s refined copper imports down by a quarter in August from July, the second month in a row the world’s top copper consumer had cut purchases. [ID:nHKG189580]
The fall has swelled LME inventories and triggered worries demand outside China will not pick up quickly enough to make up for the expected slack in Chinese imports.
Aluminum MAL3 ended at $1,815 a tonne from $1,840, having earlier hit $1,802 to match Sept. 14’s near two-month low.
Latest LME data showed stocks fell 4,450 tonnes but remained near a record 4.6 million tonnes.
“All risky assets at the moment are correcting, it’s difficult to see why aluminum wouldn’t follow given how high stocks are,” said Jesper Dannesboe, senior commodity strategist at Societe Generale.
Zinc MZN3 closed at $1,880 a tonne from $1,864, battery material lead MPB3 at $2,185 from $2,171, while steel-making ingredient nickel MNI3 ended at $16,900 from $17,100.
Tin MSN3 closed at $14,400 from $14,350. A dominant position holding more than 90 percent of stock warrants and cash contracts in tin has pushed up the premium for cash material over the three month price to $700. [ID:nLN605546]
Metal Prices at 1842 GMT Metal Last Change Pct Move End 2008 Ytd Pct
move COMEX Cu 273.10 3.15 +1.17 139.50 95.77 LME Alum 1813.00 -27.00 -1.47 1535.00 18.11 LME Cu 6001.75 51.75 +0.87 3060.00 96.14 LME Lead 2195.00 24.00 +1.11 999.00 119.72 LME Nickel 16950.00 -200.00 -1.17 11700.00 44.87 LME Tin 14450.00 -200.00 -1.37 10700.00 35.05 LME Zinc 1875.00 11.00 +0.59 1208.00 55.22 SHFE Alu 14745.00 -130.00 -0.87 11540.00 27.77 SHFE Cu* 47220.00 -990.00 -2.05 23840.00 98.07 SHFE Zin 15050.00 -100.00 -0.66 10120.00 48.72 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Maytaal Angel in London; Editing by Christian Wiessner)